Dubai Airshow: aviation industry gathering a sign of post-pandemic recovery

Environmental sustainability, emerging technology, air cargo growth and aviation start-ups will be a big focus

Dubai Airshow, taking place this week, is the first major global aerospace exhibition in the two years since the aviation industry was hit by the worst crisis in its history, and is a bellwether for the sector's rebound from the Covid-19 pandemic.

This year's event of the civil and military exhibition – a major display of products from jumbo jets to military drones – held against the backdrop of the global pandemic, is significant because it indicates a return to some normality in an industry profoundly changed by the crisis. Industry players will convene from November 14 to 18 at Dubai World Central to reconnect with customers face to face, show new products and to chart a path towards sustainable recovery.

"It's clearly a symbolic event as the world is reopening, airlines, manufacturers and suppliers are all meeting once again and of course in a market that has been central to the recovery in scheduled services where airlines from the region were flying earlier than many others," said John Grant, chief analyst at data specialist company OAG.

Dubai's biennial event for commercial and military deals worth billions of dollars takes place after Covid-19 forced organisers to cancel the Paris Air Show in Le Bourget in 2021 and Britain’s Farnborough International Airshow in 2020.

The airshow comes as weakened airlines emerge from the pandemic, review their fleet plans and rebuild their flight networks, as they phase out older, less fuel-efficient aircraft.

Commercial aircraft deals are expected to be lighter than the record-breaking plane order bonanzas of past editions with airlines focusing this year on potentially adjusting their existing orders, increasing freighter capacity amid a boom in air cargo business and making commitments to meet their sustainability goals or adopt new technologies, analysts say.

"Manufacturers and others will regard this event as a great opportunity to show confidence in aviation’s future," said Richard Aboulafia, analyst at aerospace consultancy Teal Group. "However, orders are another story. For everyone, the game has been about backlog management."

The "big exception" to this is the air cargo market and a freighter version of the Airbus A350 and the Boeing 777X widebodies will be major topics for discussion at the Dubai Airshow, he said.

"We could possibly see a launch order for either or both," Mr Aboulafia said.

Demand for air cargo is well above pre-pandemic levels but capacity constraints persist. Global freight demand, measured in cargo tonne-kilometres, was up 9.1 per cent in September compared with the same month in 2019, according to Iata.

Willie Walsh, director general of Iata, said he would not be surprised to see some aircraft orders at the show given that airlines retired older aircraft during the pandemic and will need to rebuild their fleets as travel demand gathers pace, although many airline chiefs are taking a cautious approach.

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Dubai Airshow through the years - in pictures

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The Dubai Airshow is expected to be a platform for "good deals" for civil and military contracts, Sheikh Ahmed bin Saeed, president of Dubai Civil Aviation and chairman and chief executive of Emirates, said ahead of the event. Coming out of the pandemic, airlines are also considering the type of aircraft models that will propel growth in a post-Covid travel era.

Unlike a decade ago when carriers opted for large wide-body jets, the crisis has accelerated a shift in preferences towards narrow-body aircraft with long-range capabilities, such as the Airbus A321 Neo, particularly the long-range and extra long-range variants, and the Boeing 737 Max family, analysts said.

The Gulf "super-connector" airlines will continue to prefer twin-aisle aircraft because they need the longer range and larger belly-hold for cargo, albeit with a shift towards smaller widebodies such as the Airbus A350 and Boeing 787 Dreamliner.

Boeing will display its 777X widebody at the Dubai Airshow, the aircraft's international debut, amid growing ire from the jet's launch customer Emirates because of the manufacturer's continued delays. The airshow will be a platform for the US plane maker and the Dubai-based long-haul airline to hold talks on the jet, which Boeing had originally planned to deliver in June 2020, but is now earmarked for the end of 2023. Emirates had ordered 126 of the 777X jets and 30 of the smaller 787 Dreamliner wide-body jets.

"It's interesting that Boeing will showcase its new 777-9 in Dubai while frictions play out ... over long delays and uncertainty as to when it will receive initial deliveries," aviation consultant John Strickland said.

Emirates is considering switching some of its 777X jets on order for smaller 787 Dreamliners because of delays in the new aircraft’s debut, Sheikh Ahmed said in May.

This year's aerospace trade show also comes amid rising oil prices, with prices hovering above $80 per barrel, adding to the challenges airlines face. Fuel typically makes up 25 per cent of an airline's cost.

"The rise of jet fuel prices is becoming another major headache to the aviation industry during the post-Covid-19 recovery process," said Linus Bauer, founder and managing director of Bauer Aviation Advisory. "Unfortunately, a constant rise in oil prices towards 2013-2014 highs could also break the neck of a few airlines that have been struggling to survive for years, including during the pandemic."

Rising oil prices may force airlines to increase air fares or bear the cost and lower their profit, said George Ferguson, senior aerospace analyst at Bloomberg Intelligence.

"At current prices we aren't terribly worried but as you approach $100 per barrel more demand gets sidelined," Mr Ferguson said.

The current oil prices can also be good news for airlines because they indicate a global economic recovery, while concerns about even higher prices will steer operators towards a fleet upgrade.

"It will have a positive impact by forcing airlines to adjust their fleets towards more fuel-efficient aircraft and pursuing long-term sustainability agenda goals," said Andre Martins, partner at Oliver Wyman.

The airline industry is currently in a much healthier state than in 2020, but returning to pre-crisis levels of growth is unlikely before 2023-2024, analysts say.

Passenger travel demand is picking up, driven mainly by domestic markets such as China and the US. International traffic continues to lag behind owing to border closures or quarantine measures in some countries and a lack of co-ordination between governments on harmonised travel requirements. However, developments such as the recent US policy change to reopen travel from 33 markets for fully vaccinated foreigners from November is a relief for many airlines.

"When governments withdraw restrictions to travel, such as those in the US and UK, then we see a strong rebound in capacity," Mr Strickland said. "The challenge is that this is coming in typically lower-margin leisure and visiting family and friends traffic and not in the higher-margin long-haul business travel that is critical to some airlines."

The global aviation industry convening in Dubai next week has been much changed by the pandemic, which hammered travel demand, withered revenue, grounded fleets, slashed jobs and forced airlines to seek government aid. Industry players at the Dubai Airshow will reflect on how to build back better and greener. From sustainable aviation fuels and carbon offsets to hydrogen or electric planes by mid-2030s, they will discuss ways to reach net-zero carbon goals by 2050.

"The Dubai Airshow will undoubtedly mark a milestone on the flightpath to a more sustainable future in the post-pandemic era," Mr Bauer said.

What to expect at the Dubai Airshow 2021

The Dubai Airshow 2021 is expected to attract more than the 80,000 visitors that flocked to the site in 2019, Timothy Hawes, managing director of show organiser Tarsus, said. About 1,200 companies are exhibiting, of which 371 are new exhibitors and 80 are start-ups.

"On the exhibitor side we far exceeded 2019 numbers," he said. "Signs are very positive for visitor numbers as well."

Wearing masks and maintaining social distance is mandatory on site but visitors will not be required to present PCR tests or proof of vaccination as per Dubai regulations for exhibitions, he said.

"There is a huge amount of excitement in that people haven't been able to meet face to face over the last two years and this is an opportunity for people to exhibit and showcase new launches," he said. "There is excitement and confidence in being able to come to the air show."

This edition will also feature a Tech Zone and Vista, a new start-up launchpad. Daily conferences will hold discussions on air cargo, sustainability, air traffic management and aerial mobility.

Airbus, which aims to develop the world’s first zero-emission commercial aircraft by 2035, will exhibit a mock-up of its 'ZEROe' aircraft at the show.

UAE's defence conglomerate Edge said its subsidiaries will announce 13 new product launches to market, as well as new partnership signings and joint venture agreements at the show.

Russian conglomerate Rostec will officially unveil its new Checkmate fighter jet at the show. Russian helicopters on their international debut include the light multipurpose helicopters Ka-226T Climber and Ansat, attack helicopters Ka-52 and Mi-28NE, as well as multipurpose heavy Mi-171A2.

Italian aerospace company Leonardo will display its AW609 tilt-rotor at the show, its first appearance at an exhibition outside Europe and the US.

"Our partners in the Middle East continue to be of great importance to Leonardo and we believe that the Dubai Airshow will give us the chance to further strengthen these ties and pursue a range of business opportunities," Pasquale Di Bartolomeo, Leonardo's chief commercial officer, told The National. "This year’s edition, taking place as we start to emerge from the global emergency caused by Covid-19, is going to be an important showcase for Leonardo."

Dubai Airshow visit at a glance

Dates: November 14 to November 18. Open between 10am and 5.30pm each day.

Location: Al Maktoum International Airport, DWC airshow site.

Events: Aviation geeks and plane-spotters can watch the flying displays from the SkyView grandstand seating beside the runway with performances by UAE's Al Fursan, Saudi Hawks, Russian Knights and others.

Tickets: Free entry into the SkyView from 1pm to 5.30pm.

Expo 2020 link: Shuttle buses will transport visitors between Dubai Airshow and Expo 2020, so they can experience both global events.

Updated: November 14th 2021, 11:30 AM
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